Economies of Scale and Orchestras

As quantity of production increases from Q to Q2, the average cost of each unit decreases from C to C1

A recent post by Drew McManus at Adaptistration reminded me of a brief argument I had with Greg Sandow at his blog.  In my previous post I talked about one way to increase performance or earned revenue through Price Discrimination for Orchestra Tickets.  Another way to increase performance revenue as well as lower costs is by changing the scale of the operations.

This is commonly referred to as Economies of Scale, and no, this has nothing to do with reducing pay or cutting back a season to lower costs.  The reduced costs comes about as the result of increased production, thus lowering cost per unit.  As the Investopedia defines it:

The increase in efficiency of production as the number of goods being produced increases. Typically, a company that achieves economies of scale lowers the average cost per unit through increased production since fixed costs are shared over an increased number of goods.

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Chinese Orchestras in the Bay Area

Firebird Youth Chinese Orchestra of San José, California performing at California Theater in 2006

The San Francisco Bay Area is a Metropolitan region encompassing San Francisco, Oakland, and San Jose as well as a number of surrounding cities and ‘burbs.  With a population approaching 8 million, it is also home to one of the largest concentrations of Chinese Americans in the US at a little over half a million according to the 2010 census.

What I’ve discovered is that the Bay Area is also home to probably the greatest concentration of Chinese Orchestras in the US.  As I’ve been compiling a database of ethnic orchestras in North America (though concentrating, in particular, on the United States) I’ve since discovered just a little over two dozen ensembles in the Bay Area alone.  It seems that California in general has the highest concentration of Chinese Orchestras of all the States (cf. the geographic region between Chicago and Detroit which seems to have the highest concentration of Arabic and Middle Eastern ensembles and Orchestras in the US).

What’s particularly striking about the Bay Area’s ensembles is the number of Youth Orchestras, and, in a particular case, a k-5th grade Chinese Orchestra.  The other striking thing about these (and other ethnic ensembles throughout the US) is the number (roughly half) that have formed since the internet revolution (early to mid 90s), and the number that have formed within the past ten years or so (nearly a third of the total number).

I’ve yet to do a rigorous statistical analysis of the numbers as I’m still just compiling the database and doing the tedious task of getting numbers (year formed, number of musicians in the ensembles, etc.) so the preceeding paragraph is just a very rough sketch, but if the trends I had been seeing in the Middle Eastern ensembles is any indication of what’s happening with the Chinese ensembles, there is definitely growth in the number of groups formed and the rate is accelerating somewhat.

Granted, there might be some bias in the number of groups as obviously those groups that are no longer active are less likely to show up in simple internet searches.  For all we know there could have been many more Chinese Orchestras in the years or decades before the internet.  Indeed, there seemed to be a high number of Chinese Opera troupes operating in the states during the last half of the 19th century to first half of the 20th century (see Rodecape, 1944 and Mina Yang, 2001).  The situation was similar in New York Chinatown during the period of the National Origins Act when there were up to five separate Chinese Opera Houses in operation (Rao, 2000; 2002).

On the other hand, there is also the fact that many cultural institutions with ethnic minority groups will stay well below the radar of the majority population (cf. MacLachlan, 2008 for a discussion of ‘underground’ intra-congregational music dissemination, performance, and support) for reasons that are systemic as well as cultural (Rao, 2000). Continue reading